The difference between the swap rate and the rate on a Treasury security of the same maturity is called the
A)swap spread
B)risk premium
C)swap basis
D)settlement spread
E)LIBOR

Question

Quizplus · Accepted Answer

The difference between the swap rate and the rate on a Treasury security of the same maturity is called the swap spread. This represents the additional amount of yield that investors require to invest in a swap versus a risk-free Treasury security. Therefore, choice A is the correct answer. The other options are not applicable to this scenario.

The Difference Between the Swap Rate and the Rate on a Treasury